Another FLAT day As expected. Will possibly be FLAT again next week. Vaccine News Hype will cool off... and Covid cases exploding will all lead back to Gloves counters. A great opportunity to add. Money in the Banks Stocks this week will come back after their QR...which is Not going to be as good as gloves.
China National Pharmaceutical Group Corp (SINOPHARM), a Chinese state-owned enterprise, announced on Wednesday that data from late-stage clinical trials for its Covid-19 vaccine are «BETTER THAN EXPECTED», Reuters reported.
In Morocco, Dr. Abdelhakim Yahyane, a member of the National Scientific Advisory Committee on Vaccination, told Yabiladi earier this week that vaccine trials in the country «have REACHED THE FINAL PHASE».
We are impatiently awaiting the end of this process, which could probably happen BY NEXT WEEK
Wats de big deal wit vaccine role out?does it means tat all de glove n ppe products have to stop using when role out?virus will disappear immediately?if it is,y all glove makers still making tremendous profit n capacity fully load up until de nxt few quarters wit collected deposit 30%?y so many new entrants joined dis glove bandwagon?simple equation as 1+1,think about tat
Guys, sadly to say although the epidemic is getting worse and gloves are still in high demand and all other glove counters fundamental are still good but sentiment and funds has shifted to other counters especially banking, plantations and automobiles because of the vaccine news. I have disposed all my gloves stock except Comfort and anticipating a good upcoming quarter announcement maybe with some dividend and bonus issue as well because I know only Comfort is much undervalued at this price right now.
Thanks for sharing the priceless vud. IB avoid paying substantial return also maximised their warrant earnings by pushed down prices... Very logical factor.. so the actual reality despite good qtr result, price still push down dramatically was due to such manipulation.
comfort do not have any structured warrants expiring anytime soon in 2020.... CA expiring on 30 June 2021, ex-price 6.00 CB expiring on 16 Aug 2021, ex-price 4.80 CC expiring on 16 Aug 2021, ex-price 5.00 CD expiring on 16 Apr 2021, ex-price 6.50 CE expiring on 28 July 2021, ex-price 5.80 CF expiring on 30 Sept 2021, ex-price 5.28 CG expiring on 21 may 2021, ex-price 5.58
Tradeview Commentaries 14th November 2020 - Unwavering Confidence In Glove Makers In Spite of Vaccine Newsflow
Dear all my friends who celebrates, happy Deepavali. May this joyous occasion be celebrated with your loved ones.
The market sentiment over the week was a mixture of anxiety and joy. Joy for those who believed in value stocks and blue chips, whereby it surged tremendously. Anxiety however, are for investors of glove, PPE and related stocks which reacted adversely due to the news of Pfizer vaccine.
On a positive note, following US elections and Pfizer vaccine news, foreign funds have been flowing back to Malaysia for 3 consecutive days and even exceeded 20% overall market participation level.
In the coming weeks, there will be more vaccine news. It will likely be Moderna and Astra Zeneca to follow. Potentially, China vaccines will also come through with their phase 3 safety data.
In this case, it will bode well for Value stocks (Banks, select blue chips) and Legitimate Vaccine related companies
How about glove, is it all over?
Through the year, I have done many site visits personally and met with management of key industry players, even spoke with established distributors. Whatever I have shared are not information pluck from the sky based on airy fairy hopes but on objective facts. I will update all my latest view post-Pfizer announcement.
1. Earnings visibility for gloves are still at least 12 month / 1 full year through 2021. (This is not a disputed fact even by the most bearish analyst for the sector. )
2. Vaccine or no vaccine, ASP and demand won’t fall off the cliff. (Again not disputed fact even by the most bearish analyst)
3. Mass vaccination will take time, and implementation for the world even longer. At the very least 1 year. (This is a fact stated by WHO & Dr. Fauci.)
4. Glove strong demand due to severe shortage will last through to 2022. New hygiene practice and structural step up, increased healthcare budget for governments around the world and stockpiling requirements contributes to this. (This is a fact)
5. Potential future oversupply concern. (Two camps arguing with 1 side arguing due to new entrants there will be oversupply but I don’t believe this as new entrants can’t compete with established players due to certification, safety standards, economies of scale and technical know how)
6. Eventual decline in mid 2022/2023 for ASP and demand (strongest argument for glove bears. My view - I can’t tell what happens in 18 / 24 months. No one can. As the time progresses, more visibility comes through. But I believe ASP will plateau later than sooner, definitely not this year)
7. Glove stocks are overvalued. These are noises by naysayers and bears. No matter which method I adopted, PER multiples against past year Standard Deviation, DCF or the most accurate EV/EBITDA (EV ratio), dividend yield forecast, gloves stocks are undervalued and a mile from being overvalued. This is a fact. If analysts are objective and fair in their assessment for all companies in Bursa using the same stringent assessment scrutinising glove stocks, there will be absolutely no companies that we can buy or invest anymore. Tech stocks are by far grossly overvalued, recovery stocks like airlines / tourism are taking into account future earnings which does not exist, local vaccine related stocks with MOU has no proof of ability to deliver as the best vaccines are taken up.
In a nutshell, I think some investors and select funds are overly conservative in valuing glove stocks. They are worried being caught as the last one holding the stocks choosing to forego 1 full years of record Profits and potential bumper dividend.
Use this opportunity to buy on weakness. When value emerges ignore the noises. I think Riverstone, Hartalega, Top Glove, Supermax, Sri Trang, Kossan are good fundamental companies worth a place in your portfolio regardless of the “overnight vaccine experts” who think otherwise.
One key thing you have to remember, smallpox can be eliminated i in almost 200 years of effort is because you get antibody for whole life once you are vaccinated or you get cured after diagnosed with smallpox. For Covid 19, there is no single saying that you can get antibodies for whole life by vaccine or get cured from Covid 19. But, there have been reported case of people diagnosed with Covid 19 again even successfully cured from this virus previously.
Two possibilities. 1. Antibody only for short term. 2. Virus is mutating
1. gloves is easy to understand business, demand and supply also easy to forecast. 2. besides pandemic induced demand, glove demand rise with population growth. yearly, world population will just keep increasing. 3. developed countries usage of gloves are 3 times more than developing countries. however, pandemic created new norm in developing countries which see rising awareness on hygienic practices including wearing gloves. not only gloves companies have to meet increased demand from developed countries, they also need to supply to new customer in developing countries. 4. look at the rise of production of gloves, 20 years ago only in hundred of millions, now production in the billions. it will just keep increasing. that's the reason many new entrants to glove sector. 5. gloves mostly owner operated companies. no owner would like to see their business goes down under. so, it will continue to be managed well. 6. choose to invest in the existing gloves companies who have been in the business for a lot longer than the new entrants. why ..? because existing company are currently seating on heaps pile of cash. they are in the better position to protect their market share with advanced R&D, competitive pricing, retain top talents, factory expansion etc.
investing long term in this kind of companies hardly go wrong if ones know the value will just keep increasing. just sharing my perspective with the investment community.
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dusti
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Posted by dusti > 2020-11-13 15:02 | Report Abuse
Needs to do a convincing shot